Appraisal myths debunked

Legally, an appraiser has to be state certified to produce substantiated appraisal reports for federally-supported transactions. Also by law, you have the ability to receive a copy of the completed appraisal from your lender. Contact Di Cicco & Associates if you have any concerns about the appraisal process.

Myth: The value that is ascertained by the appraiser will be equivalent to the market value.

Fact: While most states uphold the suggestion that assessed value is equal to estimated market value, this usually is not the case. Interior remodeling that the assessor has not investigated and a dearth of reassessment on nearby properties are exact examples of why there might be a differential in price.

Myth: The appraised value of a home will differ depending upon whether the appraisal is conducted for the buyer or the seller.

Fact: There is no real interest on the part of the appraiser in the result of the analysis, therefore he will complete his work with impartiality and independence, despite for whom the appraisal is ordered.

Myth: Any time market value is found, it should be similar to the replacement cost of the home.

Fact: The way market value is arrived at is based on what a home buyer would likely pay a willing seller for a property without being under influence from any outside party to buy or sell. The dollar amount necessary to reconstruct a home is what forms the replacement cost.

Myth: There are certain methods that appraisers use to show the value of a property, like the price per square foot.

Fact: There are many different methods that an appraiser will use to make an in-depth analysis of every factor pertaining to the property, such as the size, location, condition, how close it is to specific facilities and the cost of recently sold comparable houses.

Myth: In a robust economy - when the values of houses in a given neighborhood are found to be increasing by a certain percentage - the values of individual properties in the area can be expected to appreciate by that same percentage.

Fact: Any worth at which an appraiser arrives in regards to a particular property is always personalized, based on certain factors concluded from the data of comparable houses and other considerations within the home itself. It doesn't matter if the economy is on the rise or declining.

Myth: Just looking at what the home looks like on its exterior gives an excellent idea of its value.

Fact: Property value is determined by a multitude of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. Obviously, none of these factors can be found just by inspecting the property from the exterior.

Myth: Because consumers fund appraisal reports when applying for loans to buy or refinance their house, they own their appraisal.

Fact: Unless a lender releases its interest in the document, it is legally owned by the lending agency that ordered the appraisal. However, consumers must be provided with a copy of the appraisal report upon written request, under the Equal Credit Opportunity Act.

Myth: Consumers need not be concerned with what is in their document so long as it meets the requirements of their lending institution.

Fact: A consumer should definitely read through their document; there may be some questions or some worries with the accuracy of the report that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can serve as a record for the future, as it contains an incredible amount of data - including, but certainly not limited to the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the proximity.